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problem: A zero-coupon bond with 2.5 years to maturity has an YTM = 25 percent. A three year annual-coupon bond has a face value of 1,000 dollar and a 25 percent coupon rate. The coupon bond also has an YTM = 25 percent. Does the longer maturity bond have larger interest rate sensitivity? Why or why not? Compute for each bond the percentage price change associated with a change of yield to maturity from 25 percent to 26 percent.

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